Describe the type of currency regime (pegged, floating), recent pattern of exchange rate changes (a chart of the last year from an internet source would be helpful), whether there are futures or forwards available on the currency.

Prepare a risk analysis of a country of your choice (excluding developed countries such as the U.S.A., Canada, the U.K., the euro-area countries, etc.; however, you may choose to analyze Japan).Prepare a risk analysis of a country of your choice (excluding developed countries such as the U.S.A., Canada, the U.K., the euro-area countries, etc.; however, you may choose to analyze Japan).

Here are some general guidelines:
– Look at recent Wall Street Journal, Financial Times, or The Economist articles for current events that have put the country in the news and discuss what the current climate is for multinational investment.
– Visit the library’s website and check out the following sources: Country Commerce, Country Watch, Business Source Premier, plus the several World Bank-related sites available through the library.
– Other useful sources of information are: International Monetary Fund, OECD, http://europa.eu/, the sites of the country’s central bank, Professor Harvey’s website at Duke University (http://www.duke.edu/~charvey/)
– Include in your country reports the latest information on macroeconomic variables (present and projected): for example, type of economy (capitalistic, socialistic), short and long term interest rates, last three years’ inflation rates, GDP, unemployment rates, etc.
– Describe the type of currency regime (pegged, floating), recent pattern of exchange rate changes (a chart of the last year from an internet source would be helpful), whether there are futures or forwards available on the currency. Also, discuss the importance of foreign capital flows for the country.
– Sovereign debt (and its rating, past and present) is usually important.
– Government facts are valuable: form of government, party in power, chief rivals, economic philosophy, and current issues.
– Demographic information is important: for example, religious backgrounds, general education level, average age, population, social benefits.
– It is said that there are four major factors that attract foreign direct investment:
o Stable property rights
o Peaceful industry-labor relations
o Political stability
o Cost advantages in wages, taxes, and infrastructure
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– The report must NOT be a laundry list of purposeless numbers. Make sure to explain why it is that you mention any statistics. What are you trying to illustrate? What conclusions do you reach?

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